(Article from Insurance Law Alert, July/August 2026)
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Holding
The Missouri Court of Appeals affirmed summary judgment for insurers, holding that claims alleging deceptive marketing of opioids fall within a products exclusion, even where the marketing is not alleged to specifically reference the insured’s products. Opioid Master Disbursement Tr. II v. ACE Am. Ins., 2026 Mo. App. LEXIS 561 (Mo. Ct. App. July 21, 2026).
Background
Mallinckrodt and its related entities manufactured and sold opioids and ingredients used to manufacture opioid products. After facing more than 3,000 opioid-related lawsuits, Mallinckrodt and its related entities filed for bankruptcy in 2020. As part of the bankruptcy proceeding, Mallinckrodt’s insurance coverage rights were transferred to a trust established to administer opioid-related claims.
Mallinckrodt selected eleven exemplar lawsuits to illustrate its pre-bankruptcy liability. The suits alleged, among other things, that Mallinckrodt engaged in allegedly misleading “unbranded marketing”—promotion of opioids in general without reference to a particular brand—that understated the risks of opioid use, encouraged overprescribing, and contributed to opioid-related bodily injuries.
Mallinckrodt sought coverage under primary policies that contained a products exclusion for injury “arising out of” the insured’s “product.” “Product” was defined to include warranties, representations and failures to provide warnings or instructions concerning the product. The trust argued that because certain of the marketing was alleged to be of opioids in general, rather than Mallinckrodt’s opioids in particular, the products exclusion did not eliminate coverage. The trial court granted summary judgment to the insurers, and Mallinckrodt appealed.
Decision
The Missouri Court of Appeals affirmed. The court explained that under Missouri law, “arising out of” is a broad and unambiguous term requiring only a causal connection—not direct or proximate cause—between the injury and the subject of the exclusion.
The court concluded that exemplar suits alleged a sufficient causal connection between Mallinckrodt’s products and the claimed injuries. The complaints alleged that Mallinckrodt (i) falsely represented that opioids were non-addictive, safe for chronic pain, and effective at high doses; (ii) disseminated those representations through physicians, publications, and patient advocacy groups; and (iii) thereby increased opioid use and sales of Mallinckrodt’s opioids and active pharmaceutical ingredients. The court therefore held that the alleged injuries “arise out of, flow from, or have origins in” Mallinckrodt’s marketing conduct and fell within the products exclusion.
The court found persuasive decisions applying substantially similar products exclusions to preclude coverage for opioid claims in The Travelers Property Casualty Co. of America v. Actavis, Inc., 225 Cal. Rptr. 3d 5 (Cal. Ct. App. 2017) and Dundon v. ACE Property & Casualty Ins. Co., 2026 U.S. Dist. LEXIS 27567 (E.D. Pa. Feb. 10, 2026).
Comments
This decision adds Missouri to the jurisdictions applying products exclusions to bar coverage for claims based on alleged marketing of products, even where the allegations concern the marketing of the product generally and not just the marketing of the insured’s branded product in particular. The decision also reinforces the breadth Missouri courts give to “arising out of” language in exclusions: only a causal connection, rather than proximate causation, is required to preclude coverage.